Eskom admits it lied about Trillian payments
Not only had Oliver Wyman failed to approve the payments – it had red flagged them and recommended a legal review of the entire contracting process
Eskom chief financial officer Anoj Singh is allegedly behind the power utility’s lies when it defended payments of R1.6bn to Gupta-linked financial advisory firm Trillian and global consultancy McKinsey.
Eskom admitted on Monday morning that it had lied to Business Day and other media in June when it said that a review by Oliver Wyman, a management consultancy headquartered in New York, had found the payments to be above board.
In fact, Oliver Wyman had red-flagged the payments and recommended a legal review.
Two sources with direct knowledge of the matter who cannot be named because they are not authorised to speak to the media, said the false information was supplied by Singh. "The information to the media came from the office of the chief financial officer," said one.
Singh is at the centre of corruption allegations involving the Guptas, including arranging a R1.6bn guarantee and R660m prepayment to help the Guptas buy Optimum coal mine and for his role in the Trillian payments after being hosted by the Guptas in Dubai. He was placed on special leave in July at the insistence of Eskom’s lenders.
The sources said the Oliver Wyman consultancy last week forced Eskom to own up to its lies about the Trillian payments.
"Oliver Wyman saw media articles that alleged it had approved and given the payments the thumbs up," said the source. "In a letter of demand last week, they pointed out this was a deliberate misrepresentation and demanded Eskom correct this."
This was later confirmed by Eskom. "We received a legal query from Oliver Wyman concerning a factually incorrect statement we issued based on the firm’s technical review undertaken on Eskom’s behalf," Eskom’s head of legal, Suzanne Daniels, said on Monday.
"We have taken full responsibility for same, hence the correction. Oliver Wyman is fully justified to be aggrieved by this occurrence; we are in the process of remedying our relations with … Oliver Wyman."
Daniels would not confirm or deny Singh had been identified as the source of the misinformation. "I want to place it on record that Eskom is treating the matter with the seriousness it requires and, to this end, appropriate steps, which cannot be divulged at this point, will be taken against anyone responsible for the statement in question," she said.
On Monday night Singh confirmed he had commissioned a report by Oliver Wyman "to see if there was any value received" from payments to McKinsey and Trillian. But he would not be drawn on allegations that he was responsible for Eskom misleading the media.
Trillian and McKinsey were paid R1.6bn between April 2016 and February 2017 for joint consultancy work done in 2015 and 2016.
McKinsey said it ended its relationship with Trillian in March 2016 and with Eskom three months later.
Any payments from Eskom to Trillian after this "were governed by Eskom’s rules and processes for approval of third party payments".
This is not the first time Eskom appears to have deliberately misled the media and the public on the Trillian and McKinsey payments.
Earlier in 2017, the utility told Parliament and the media it did "not pay a cent to Trillian". Eskom caused the public enterprises minister to lie on the same matter to Parliament denying it had paid Trillian. That information also came from Singh’s office.
Eskom was later forced to admit it had made payments to Trillian. In June, Eskom strongly defended the payments after the release of a damning report on Trillian by advocate Geoff Budlender.
At the time, Eskom said Oliver Wyman had conducted an external review and concluded that "all payments" were "based on prudent costs incurred and value created". This was at odds with findings by two subsequent investigations, which revealed a host of irregularities, including that the payments were made without proper supporting documents.
Trillian has denied any wrongdoing and insists it has billed only for work done. Both McKinsey and Eskom are fully aware of the relationship between the parties, it said.